PVM.

asx
Speculative Buy
Oilex Ltd
20 Dec 2010

PMI GOLD CORPORATION

Targeting 2013 Production with First Class Exploration
PMI Gold Corporation (PMI, Company) is a Ghana focussed gold explorer/developer with near term production potential as well as outstanding exploration tenure. The Companys tenement holdings are located in the golden triangle in Ghana which has endowment of ~200Moz. PMIs current resource base is 1.6Moz with good potential to significantly increase over time. The Company is planning to commence production in late 2012/early 2013 at a targeted rate of 150kozpa. To this end, PMI plans to complete a prefeasibility study into the development of its Obotan and Kubi projects during CY2011, with a view to making a decision to mine in early 2012. In addition, exploration will be undertaken in parallel with the development studies with +$7m allocated for the next 12 18months.

Share Price Valuation Valuation Brief Business Description:

Gold explorer and developer

C$0.65 A$0.93 C$0.93

Hartleys Brief Investment Conclusion

Ghana focussed explorer seeking to transition to gold producer

Chairman & MD
Mr Peter Buck (Non-Exec Chair.) Mr Douglas MacQuarrie (Pres & CEO)

Top Shareholders
Macquarie Group Waratah Investments 13.5% 10.2%

Gold: Developer/Explorer

Company Address
Suite 511, 475 Howe Street Vancouver, BC, Canada V6C 2B3

Obotan the base load feed

The Companys main focus is the 1.2Moz Obotan project. Production is targeted at ~100kozpa mainly from open pits from 2013, with underground potential in later years. Obotan has historically been mined by Resolute so the geology and metallurgy are well understood. In addition, the previous mining reduces the environmental permitting risk.

Issued Capital
- fully diluted

192.8m 247.2m $125.3m $160.7m $35.0m $0.0m $90.3m $58/oz

Market Cap
- fully diluted

Kubi to supplement Obotan

The Kubi Main deposit has a current resource of ~348koz at a grade of 5.4g/t. The project is envisaged as a potential satellite operation to Obotan yielding ~50kozpa from an underground operation with the ore trucked to the Obotan plant. Kubi Main has also been historically mined so the mineralisation and metallurgical characteristics are well understood and should enable the fast tracking of development studies.

Cash (est) Debt EV EV/Resource Oz

FY11e
Prod (koz Au) Op Cash Flw NPAT CF/Share (cps) EPS (cps) P/E (2.3) (3.9) (2.0) (2.0) (32.3)

FY12e
24 8.1 (3.9) (1.4) (1.4) (45.2)

FY13e
140 (8.0) (11.2) (1.5) (3.3) (19.9)

Exploration activity
Outside of the development targets, the Companys exploration ground is very high quality. The Kubi project is just 15km along strike from the 60Moz Obuasi mine operated by AngloGold Ashanti. PMI holds 25km of strike of the two prospective shear zones associated with the Obuasi mineralisation, yet this strike length has only been sporadically tested by drilling. At Obotan, the Company controls 3 mineralised trends of ~70km each. Historic drilling has intersected a number of good grades and widths, yet the follow up work has been minimal. We consider the potential for PMIs ground to host multi-million ounce gold deposits is relatively high, with any such discovery likely to have a very material impact on the share price.

Resources (koz Au)

Pmi Gold Corp 1.00 0.90 0.80

1,557
7.0

6.0
5.0

0.70
0.60

C$ 0.50
0.40 0.30 0.20

4.0
M 3.0

2.0
1.0

0.10

Initiate coverage with Speculative Buy

The Company is trading on an EV/oz of $58/oz, which is a substantial discount to its West African peers (average of ~$190/oz). We have a funding weighted valuation for the Company of A$0.93/share (implied EV/oz $93/oz) using Hartleys commodity price estimates, which increases to A$1.65/share (implied EV/oz $182/oz) at spot prices. We see PMI as having an excellent blend of near term production and exploration upside and expect the Company to be re-rated as the development studies are progressed and exploration results flow in. We initiate coverage of PMI Gold Corporation with a Speculative Buy recommendation.
Hartleys Limited ABN 33 104 195 057 (AFSL 230052)

0.00 Dec-09 Apr-10 Aug-10

0.0 Dec-10

Source: IRESS Volume - RHS PVM Shareprice - LHS Sector (S&P/ASX SMALL RESOURCES) - LHS

Author:
Andrew Muir Senior Resources Analyst Ph: +61 8 9268 3045 E: andrew_muir@hartleys.com.au
Hartleys has provided corporate advice w ithin the past 12 months and continues to provide corporate advice to PMI Gold Corporation. See back page for Disclosure.

141 St Georges Terrace, Perth, Western Australia, 6000 Page 1 of 22

Hartleys does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

Hartleys Limited

PMI Gold Corporation

20 December 2010

SUMMARY MODEL
Pmi Gold Corporation PVM
Key Market Inform ation Share Price Market Capitalisation 52 Week High-Low Issued Capital Issued Capital (fully diluted) Options & Warrants Hedging Valuation Valuation C$0.65 C$125m C$0.96/C$0.21 192.8m 247.2m 54.44m @ A$0.24 A$0.93 C$0.93 1 2 3 4 5 6 7 8 9 #

Share Price $0.650

Directors Mr Peter Buck (Non-Exec Chair.) Mr Douglas MacQuarrie (Pres & CEO) Mr Thomas Ennison (Exec. Dir.) Dr. John Clarke (Exec. Dir.) Mr Ross Ashton (Non-Exec. Dir.) Honourable J.H. Mensah (Non-Exec. Dir.) Top Shareholders Macquarie Group Waratah Investments AJ Miller Resources Obotan Nkran OC Nkran UG Abore Asuadi Adubiaso Total Nkran OC Nkran UG Abore Asuadi Adubiaso Total Obotan Toal Kubi Kubi Main Kubi Main Kubi Total Grand Total Category Ind Ind Ind Ind Ind Mt Mt 0.54 0.08 1.02 0.39 1.03 3.06 5.95 3.66 2.24 1.13 2.67 15.64 18.70

December 2010 Speculative Buy

Com pany Inform ation Suite 511, 475 How e Street Vancouver, BC, Canada V6C 2B3 Tel: +1 604 682 8089 Fax: +1 604 682 8094 Web: w w w .pmigoldcorp.com

Shares (m ) 26.11 19.61 18.51 g/t Au g/t Au 1.58 4.12 1.51 1.29 1.58 1.59 2.00 3.50 1.40 1.30 1.30 2.10 2.02 Koz Koz 27.5 10.8 49.4 16.2 52.6 156.0

% 13.5% 10.2% 9.6% Attrib. Attrib. 27.5 10.8 49.4 16.2 52.6 156.0

Financial Perform ance Unit Net Revenue Total Costs EBITDA Depreciation/Amort EBIT Net Interest Pre-Tax Profit Tax Expense NPAT Abnormal Items Reported Profit Financial Position Cash Other Current Assets Total Current Assets Property, Plant & Equip. Exploration & Develop. Investments/other Tot Non-Curr. Assets Total Assets Short Term Borrow ings Other Total Curr. Liabilities Long Term Borrow ings Other Total Non-Curr. Liabil. Total Liabilities Net Assets Cashflow Operating Cashflow Income Tax Paid Interest & Other Operating Activities Prop, Plant, Equip & Devel Exploration & Eval. Investments Investm ent Activities Borrow ings Equity Dividends Paid Financing Activities Net Cashflow Ratio Analysis Cashflow Per Share Cashflow Multiple Earnings Per Share Price to Earnings Ratio Dividends Per Share Dividend Yield Net Debt / Equity Interest Cover Return on Equity C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m Unit C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m Unit C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m Unit C X C X C % % X %

FY2010A FY2011F FY2012F FY2013F 0.1 (3.0) (2.9) (2.9) (0.1) (3.0) (3.0) (3.0) 0.2 (4.1) (3.9) (3.9) (3.9) (3.9) (3.9) 0.2 (4.1) (3.9) (3.9) (3.9) (3.9) (3.9) 26.1 (25.0) 1.2 (5.9) (4.8) (6.4) (11.2) (11.2) (11.2)

FY2010A FY2011F FY2012F FY2013F 2.9 0.1 3.0 0.2 21.1 21.3 24.3 (0.4) (0.4) (0.4) 23.9 30.6 0.1 30.7 0.2 26.1 26.3 57.0 (2.0) (2.0) (2.0) 55.1 110.0 0.1 110.1 76.9 36.1 113.0 223.1 (50.0) (13.9) (63.9) (63.9) 159.2 51.6 4.8 56.4 159.0 44.9 203.9 260.3 (100.0) (9.4) (109.4) (109.4) 150.8

Inf Inf Inf Inf Inf Ind + Inf

384.8 384.8 408.9 408.9 97.5 97.5 48.4 48.4 113.2 113.2 1,053.0 1,053.0 1,209.0 1,209.0

M + Ind Inf

1.32 0.67 1.99 20.69

5.48 5.31 5.42 2.34

233.0 115.0 348.0

233.0 115.0 348.0

(M+I+I) Unit 000oz $US/oz Unit US$/oz C$/US$ A$/US$ Unit 000oz $A/oz

1,557.0 1,557.0

Production Sum m ary *Attributable Payable Gold Metal Cash Cost (excl. royalties) Price Assum ptions Gold CADUSD AUDUSD Hedging Total Forw ard Sales - Gold Forw ard Gold Price Sensitivity Analysis Base Case Exchange Rate +10% Exchange Rate -10% Gold Price +10% Gold Price -10% Operating Costs +10% Operating Costs -10%

FY2011F FY2012F FY2013F FY2013F 24 818 140 479

FY2011F FY2012F FY2013F FY2013F 1092 0.95 0.88 1301 1.00 0.91 1250 1.03 0.88 1150 1.02 0.83

FY2010A FY2011F FY2012F FY2013F (1.5) (1.7) (3.2) (0.2) (3.6) (3.7) 12.8 9.6 2.7 (2.3) (2.3) (5.0) (5.0) 35.0 35.0 27.7 8.1 8.1 (76.7) (10.0) (86.7) 50.0 108.0 158.0 79.4 (8.0) (6.4) (14.4) (86.8) (10.0) (96.8) 50.0 2.8 52.8 (58.4)

FY2011F FY2012F FY2013F FY2013F Valuation ($/s) 0.93 0.80 1.10 1.08 0.78 0.86 1.01 -

*N.B . NP A T, EP S, CFP S fo recasts are fo r FY201 1

Share Price Valuation (NAV) FY2010A FY2011F FY2012F FY2013F (1.6) (41.7) (3.1) (20.8) na na (2.0) (32.3) (2.0) (32.3) na na na (1.4) (45.2) (1.4) (45.2) na na (1.5) (42.5) (3.3) (19.9) 0.3 na Obotan & Kubi Exploration Cash Forw ards Corporate Overheads Total Debt Tax Losses Options & Other Equity Total Spot Valuation

Est. A$m 150.4 50.0 35.0 0.0 (15.7) 2.0 9.2 230.8 408.6

Est. A$/share 0.61 0.20 0.14 0.00 (0.06) 0.01 0.04 0.93 1.65

Spot Val: Gold US$1384/oz, AUDUSD: 0.989, CADUSD: 0.988 Analyst: Andrew Muir Phone: +61 8 9268 3045 Sources: IRESS, Company Information, Hartleys Research Last Updated: 20/12/2010

Page 2 of 22

Hartleys Limited

PMI Gold Corporation

20 December 2010

BACKGROUND
Advanced explorer/developer in Ghana PMI Gold Corporation [ASX: PVM, TSXV: PMV, Frankfurt: AOJMW7] is an advanced explorer-developer, focussing on its gold projects in Ghana. The Company has been listed on the TSXV since 2002 and has recently undertaken a secondary listing on the ASX. The Company has been actively exploring in Ghana since 2002 and 2 currently holds a 537km land position. PMI currently has inferred and indicated resources of 1.6Moz of gold (NI 43-101 compliant) at its Kubi and Obotan projects. Both projects also have significant exploration potential which may lead to either mine life extensions and/or production expansions. The Company is currently undertaking a sizeable drilling program on the projects, and plans to undertake a prefeasibility study into the development of the projects during CY2011, with a view to getting into production in 2013.

1.6Moz resource base

Production planned from 2013

ASSETS
Projects are located in highly prospective region Both of the Companys projects are located in the main gold producing region of Ghana on the southwest coast of the African continent. The projects are located within or adjacent to the Asankrangwa and Ashanti Gold Belts. Gold mineralisation in the region is typically hosted within Birimian sedimentary rocks as well as some types of granite, and is usually associated with major northeast striking faults.

Fig. 1: PMI Project locations and surrounding deposits

PMI Gold Obotan 2Moz

PMI Gold Kubi 407k oz

Source: PMI Gold Corporation (note on LHS, PMI projects are pre-mining resources)

Limited historic exploration with excellent potential for resource additions

The projects are surrounded by and along strike from some very large gold deposits. Critically, the same geology and structures that host these large deposits is present within PMIs projects, though there has been only selective exploration on the projects, indicating there is significant potential to upgrade the current 1.6Moz resource base. Both projects have historic open cut gold mines that were closed down at lower gold prices. Most of the resources are along strike and underneath these historic mines. Consequently, PMI has a good understanding of the geological controls, metallurgy and grade distribution of these deposits, significantly derisking development. Page 3 of 22

Hartleys Limited

PMI Gold Corporation

20 December 2010

OBOTAN PROJECT (PMI 100%) Background

Obotan covers 70km of prospective strike The Obotan project is located in the Ashanti Region of Ghana, approximately 250km northwest of the Ghanaian capital of Accra. The prospects are contiguous and cover 70km of strike of the prospective Asankrangwa Gold Belt. The Company acquired the ground between 2002 and 2008. The project is subject to a 2% net smelter royalty.

History
The Obotan project has had selective work by past explorers since the early 1990s, mainly involving soil sampling, exploration and resource drilling using both RC and diamond methods, as well as various geophysical surveys. These methods delineated the current known deposits of Nkran, Abore, Adubiaso and Asuadai. Resolute extracted ~730koz from open pits, but stopped due to the low gold price Resolute Mining Limited (Resolute) mined the project between 1997 and 2002, producing a total of 730koz from three mainly oxide open pits. The mining operation achieved recoveries of ~95%, with a high gravity gold component. At the completion of the open pits Resolute had planned to commence underground mining, having delineated mineralisation over 400m below the final depth of the Nkran pit. However the prevailing gold price at the time (~US$320/oz) yielded the underground mine uneconomic and the operation was closed, the plant sold and handed back to the Ghanaian government in mid 2006, with the mining village gifted to the Church.

Exploration
Moderate exploration work completed to date Following the acquisition of the ground by PMI in 2006, the Company commenced exploration shortly afterwards. Work completed by PMI includes numerous geophysical surveys, diamond drilling, drilling of Abore, Adubiaso, Asuadai and Nkran, as well as investigations into the development of Nkran.

Fig. 2:

PMI projects (LHS) and Obotan resources (RHS)

Source: PMI Gold Corporation

Recent drilling led to 1.2Moz resource estimate

The most recent drill program (62 diamond holes for 9,273m) was aimed at generating an initial NI 43-101 resource for the Company across a number of deposits at Obotan. The program was successful in returning numerous thick and high grade intersections. Page 4 of 22

Hartleys Limited

PMI Gold Corporation Better results included:

20 December 2010

153m @ 2.37 g/t Au from 120m, including 46m@ 5.23 g/t Au at Nkran 16m @ 4.31g/t Au from 212m at Nkran, 95.5m @ 2.16g/t Au from 218.5m at Nkran, 7.4m @ 3.98 g/t Au from 166m at Abore, and 5.0m @ 5.46g/t Au from 104m at Asuadi

Previous mining studies

2007 study investigated underground extraction In mid 2007, RSG Global undertook a review of all data and completed a concept study in regards to the potential for redeveloping of Obotan. The study indicated that the mineralisation was constrained at depth by a lack of drilling. For the mining, RSG estimated that at a 500tpd production rate (~180ktpa), mining costs were US$29.70/t and total site based operating costs were US$62.18 per tonne. If throughput was increased to 1,500 tpd (~500ktpa), operating costs were estimated to fall to US$50/t. Capital costs involving pit dewatering and the first 800m of decline were estimated at US$4.3m. RSG Global estimated that a minimum resource of 160koz of gold at 4.6g/t would be the minimum size required to cover the development and operating costs.

Resources
Obotan resource of 1.2Moz released in June 2010 PMI was able to obtain Resolutes historical exploration and mining database. From this, the Company was able to collate the historic data, and following its own drilling, generate an initial NI 43-101 compliant resource of 1.209Moz in four deposits (Nkran, Abore, Asuadi and Adubiaso). Nkran, Abore and Adubiaso were previously mined by Resolute and contain the majority of the current resources.

Fig. 3:

Obotan resource base (NI 43 -101 compliant)

Mt Indicated Grade (g/t Au) 1.58 4.12 1.51 1.29 1.58 1.59 Koz 27.5 10.8 49.4 16.2 52.6 156.0 Mt 5.945 3.658 2.235 1.131 2.667 15.637 Inferred Grade (g/t Au) 2.00 3.50 1.40 1.30 1.30 2.10 Koz 384.8 408.9 97.5 48.4 113.2 1,053.0 Mt 6.484 3.740 3.255 1.521 3.700 18.701 Total Grade (g/t Au) 1.97 3.51 1.43 1.30 1.38 2.02 Koz 412.2 419.7 146.9 64.6 165.8 1,209.0

Nkran OC Nkran UG Abore Asuadi Adubiaso Total

0.539 0.082 1.020 0.390 1.033 3.064

Source: PMI Gold Corporation.

(Resource estimate complies with JORC reporting guidelines. Nkran OC is for <250m below the natural surface; and Nkran UG> 250m below natural surface. All projects are reported at a 0.5g/t Au cut-off grade with exception of Nkran OC (Open Cut) which is reported at a 0.9g/t Au cut-off grade and Nkran UG (Underground) which is reported at a 1.5g/t Au off grade)

Resource dominated by Nkran open pit and underground

The most significant of the resources is that at Nkran, which has just over 400koz in the open pit component and a similar amount in the underground component. A key aspect of the Nkran resource is the large thickness of the mineralisation in the central parts of the deposit (see Figure 4). This thickness should enable bulk open pit and underground mining methods, yielding lower costs and greater productivity. Given the size of this deposit (+800koz), the Company intends Nkran to provide the bulk of mill feed for the proposed operation at Obotan. Significantly, the deposit remains open at depth, and has not been effectively closed off along strike, indicating the potential for further resource upgrades. The mineralisation underneath Nkran pit has not been sufficiently deeply drilled and consequently remains open at depth. We understand that the Company has a 1 2Moz exploration target for the mineralisation below the Nkran pit, given the thick Page 5 of 22

Hartleys Limited

PMI Gold Corporation

20 December 2010

widths of the orebody, and that mineralisation in Ghana typically has significant depth extensions.

Development Concept
2.0Mtpa CIL plant proposed yielding 100kozpa The Company has a development concept of constructing a largish (~2Mtpa) carbon in leach (CIL) gold processing plant centrally located to the current Obotan resources. These resources would likely to be mined via open pits, and then underground if viable, generating in the region of ~100kozpa over a ~8 year mine life. Nkran would provide the majority of feed for the plant, augmented by the other lower grade deposits. We expect that Nkran is likely to transition to an underground operation once the open pit has finished, due to the good thicknesses and reasonable grades which provides opportunities for either high grade selective and/or bulk underground mining methods. Given that the deposits have previously been mined, the Company has a good understanding of the performance of the ore bodies. We understand that Resolute was able to achieve recoveries of ~95%, though from oxide and fresh ore. We understand that the majority of the oxide ore remaining in the deposits has been mined, with the resources dominated by more fresh material. However, we believe that the ore is not refractory and preliminary test work has indicated that PMI should be able to achieve similar recoveries through a traditional CIL plant.

Open pit initially with underground potential

95% historic recoveries

Fig. 4: Nkran resource model (LHS) and Cross Section (RHS)

Source: PMI Gold Corporation

Potential for development studies to be fastracked

Given the mining history of the region, the Company may be able to fastrack some of the mining studies due to the high level of understanding of the ore bodies, the already completed geotechnical and metallurgical test work, as well as the previously completed Environmental Impact Statement. The project also benefits from close location to key infrastructure including major roads and grid power. In addition, there are no environmental liabilities attached to the previous operations.

Work Program
Feasibility study to be completed during CY2011 PMI plans to undertake a feasibility study into the development, building on the historic work, as well as a scoping study previously undertaken by Coffey Mining in early 2007. Given the history of mining on the project, some of the work required for the feasibility including environmental studies, metallurgical test work and ore body modelling, will be progressed faster than if it was a new project due to the higher level of understanding across all of these factors. The higher level of starting Page 6 of 22

Hartleys Limited

PMI Gold Corporation

20 December 2010

knowledge should enable the feasibility study to progress faster than normal, and the Company is hoping to be able to make a decision to mine in early CY2012. Permitting commenced All the necessary permitting will be commenced in parallel with the feasibility study to help fast track a mining operation. The completion of the feasibility study and consequent acceptance by the Government of Ghana will enable the conversion of the current mineral licenses into a Mining Lease in preparation for production. Other work planned will involve drilling the project with a view to increasing and upgrading the resource base. The mineralisation at Nkran plunges steeply and remains open at depth, with good potential for an underground operation post the completion of an open pit. The Company has set aside $2m to test the depth extensions beneath Nkran to determine the viability of an underground operation.

Significant infill and extensional drilling planned

Exploration upside
Regional exploration to be done in parallel to development studies In addition to the infill and extensional drilling, the Company will also progress more regional exploration with a view to delineating additional deposits. The Company has proposed to undertake drilling of up to 40,000m across all of these programs. The Company has a number of drill targets that it believes have the potential to host a multi-million once gold deposit. The licences contain ~70km strike of a major gold endowed belt, which has been cross cut by key region structures thought to be associated with hosting large gold deposits. However, many of the more regional targets have had little drilling. As can be seen from Figure 5, there are many ore grade intersections from historic drilling requiring follow up. This potential is somewhat confirmed by the presence of widespread local mining, indicating the presence of surficial gold. The delineation of additional deposits is likely to have a significant impact on the mining scenarios and project economics.

Fig. 5:

Regional exploration targets already identified

Numerous good historic drill intersections require follow up

Source: PMI Gold Corporation

Page 7 of 22

Hartleys Limited

PMI Gold Corporation

20 December 2010

KUBI (PMI 100%)

Kubi is smaller scale than Obotan The Kubi gold project is located 170km northwest of the capital city of Accra, ~46km southeast of Obotan and ~15km south of and adjacent to the 60Moz Obuasi mine. The Kubi licences are situated on the Ashanti Trend (Ashanti/Kubi shear zones), which hosts Obuasi. Obuasi is the largest underground mine in West Africa, and has been mined continuously for 113 years. The Kubi project has a 20 year Mining Lease in place. Like Obotan, Kubi has some historic mining on the licences, with Ashanti Goldfields having mined ~500kt of ore at a grade of 3.65g/t Au for 59koz in two shallow pits in 2005.

Close to the 60Moz Obuasi mine

Fig. 6:

Kubi project location (LHS) and Historic Ashanti Goldfields pit (RHS)

Kubi Gold Project 350k oz resource

Dunkwa
Google

Source: PMI Gold Corporation

Background & History

Kubi has a long history of gold mining, with mining first occurring on the project in the 1920s via eight small adits. In 1988, BHP, outlined strong gold anomalies near the historic workings and then followed up with geophysics and some drilling. Long history of small scale mining, with sporadic exploration Nevsun Ghana optioned the property from BHP in 1993 and undertook systematic exploration through to the late 1990's. This work defined gold mineralisation in a subvertical 1 15m thick gold rich zone. The company followed up this discovery by drilling 217 diamond holes to define the zone over 1,800m long and at least 700m deep within a northeast trending shear zone at the contact between Birimian and Tarkwaiian sedimentary rocks. Nevsun Ghana transferred the property to Ashanti in 1999, which mined 59koz of gold, achieving recoveries of ~95%. In 2006/2007 Ashanti backfilled the pits and completed most of their environmental reclamation. In 2007, PMI Gold purchased Nevsun Resources (Ghana) Ltd. ("Nevsun), a Barbados registered company, which held the Kubi Gold Project. The consideration for the acquisition was 9m PMI shares and US$3m cash. The project is subject to a 3% Net Proceeds of Production royalty to Royal Gold Inc.

Limited modern mining

Exploration and Development Concept

The previous mining at Kubi focused on ~400m out of the ~1.2km strike length of mineralisation. The deposit is at the intersection of a main NE-SW trending thrust and a major north/south trending fault and contained within a north-northeast Page 8 of 22

Hartleys Limited

PMI Gold Corporation

20 December 2010

trending shear zone that is close to the contact between Birimian and Tarkwaian sedimentary rocks. Kubi Main orebody ideal for underground mining The mineralisation is steeply plunging averaging ~2.6m wide with higher grades at depth. The width, geometry and grade of the orebody renders the deposit ideal for conventional underground mining. In 2008, PMI commissioned Golder Associates to undertake a scoping study into the development of Kubi as an underground mine. The study indicated the potential for production of up to 65kozpa based on a 500 - 750tpd operation using a shaft for access. The proposed mine had a ~14 year life, with the ore to be toll treated at a nearby third party mill.

Previous development study looked at Kubi as a 65kozpa underground operation and toll treating the ore

Fig. 7:

Kubi long section

High grade shoots open at depth

Source: PMI Gold Corporation

PMI is now looking to develop Kubi as a 50kozpa underground mine as a satellite to Obotan

The Company plans to build on these studies, but with a view to having a smaller underground operation yielding ~50kozpa using a decline to access the orebody, with the ore trucked to Obotan. The development of Kubi is likely to start with decline down to the 150m level and a detailed underground drilling program to better define the orebody so as to enable mine planning and development studies. Whilst the Kubi deposit is ~46km from Obotan, by road the ore may need to be trucked ~110km due to the lack of a direct route between the two projects. However, given the expected high grades of the ore, this distance is not seen as being a major cost factor, though the Company may investigate pre-concentrating the ore More metallurgical test work is underway as part of the prefeasibility study. Long lead time items such as the Environmental Impact Statement (EIS) and social issue studies have also commenced. The prefeasibility study for Kubi is to be completed in conjunction with that of Obotan to ascertain the optimal development path for both projects. A significant amount of the Kubi resource lies underneath the Supuma Shelterbelt Forest Reserve. However, the Company plans to access the deposit from underground by using a decline portal located outside of the Forest Reserve, with minimal ground disturbance within the forest.

Initial development studies have already commenced

Page 9 of 22

Hartleys Limited

PMI Gold Corporation

20 December 2010

Resources
Initial PMI Kubi resource in 2001 used a geological cut-off with minimal mining parameters considered yielding 919koz In 2007, PMI released a NI 43-101 compliant resource for Kubi of 919koz which was based on 212 diamond drill holes. This resource was defined by geological boundaries using an implied 0g/t cut-off. We understand that minimal mining parameters were considered in the generation of this resource.

Fig. 8:

2007 Kubi resource (0g/t cut-off) (NI 43-101 compliant)

Mt 5.13 5.38 10.51 Grade (g/t Au) 3.66 1.88 2.75 Koz 604.1 315.1 919.2

Category Indicated Inferred Total

Source: PMI Gold Corporation

Recent resource applied more appropriate cut off grades and widths, consequently the resource fell to 348koz but at higher grades

The Company has since updated this resource, using more mining focussed parameters including a minimum width of 2.0m and a 2g/t cut-off, with a 25g/t top cut. Consequently, this effective mining resource, which is a subset of the original resource, has reduced to 348koz. However, the grade is significantly higher at 5.5g/t Au, which we expect to be closer to the likely mined grade. The resource update has also allowed the inclusion of some of the resource into the Measured category.

Fig. 9:

Updated Kubi resource (2g/t cut-off) (NI 43-101 compliant)

Mt 0.66 0.66 0.67 1.99 Grade (g/t Au) 5.30 5.65 5.31 5.42 Koz 112.0 121.0 115.0 348.0

Category Measured Indicated Inferred Total

Source: PMI Gold Corporation

This updated resource will be used in the current mining and prefeasibility studies for the project. Of this updated resource, 95% of the material is fresh, with the remaining 5% consisting of oxide mineralisation.

Fig. 10:

Kubi resource model, looking NNW

Latest Kubi resource more robust with higher confidence

Source: PMI Gold Corporation

Page 10 of 22

Hartleys Limited

PMI Gold Corporation

20 December 2010

Exploration Upside
Excellent ground though still underexplored Given the highly prospective geology of the Kubi project, there has been minimal previous drilling undertaken outside of the Kubi Main area. Consequently, the Company plans to aggressively test a number of regional targets in addition to the feasibility and drilling of the Kubi Main deposit. Activities will include geophysical surveys and geochemical sampling as well as auger drilling to define targets for RC and diamond drilling.

Fig. 11:
Mineralisation contained in Kubi and Ashanti shears

Mineralised trends at Kubi

Larger deposits seem to occur where cross cutting structures intersect these two shears

Source: PMI Gold Corporation

Kubi has 25km strike of the prospective shears

However, only limited exploration drilling to date on the shears

The project contains ~25km of the prospective Ashanti and Kubi shear zones. The Ashanti shear zone hosts the Obuasi deposit. However, given the prospectivity of the ground, only 9 of the 25km of prospective strike length has been drill tested. Consequently, the main focus for exploration will be along the trend of these shears and where the shears intersect a number of cross cutting structures. The intersection points along these shears are thought to be the most favourable areas for large scale gold deposits. Recently, the Company has tested a prospect called the 513 Zone following up on a previously defined auger gold anomaly. This zone is ~1.3km south of the Kubi Main zone. The drill program returned some very encouraging results of similar grades and widths to Kubi, warranting further follow up drilling. Better results (all true widths) included: 3.05m @ 3.76g/t Au from 85.25m, incl. 0.32m @ 11.95g/t Au, and 5.14m @ 3.68g/t Au from 64m, incl. 0.64m @ 15.35g/t Au.

New discovery called 513 Zone in the Ashanti shear to be followed up

The mineralisation encountered in the 513 Zone appears similar to that of the Kubi Main zone and in the same host rock, a garnetized metagabbro. The 513 Zone is located on the eastern margin of the Ashanti shear which hosts Obuasi. Drilling by previous explorers was primarily focused on the Kubi shear, located to the east. Consequently the Company believes that the strike extent of the Ashanti structure within its ground has only been superficially explored to date. Page 11 of 22

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PMI Gold Corporation

20 December 2010

Follow up drilling, as well as auger drilling of a prospective zone ~4km south to the Offin River is planned for early CY2011. The Offin River has seen extensive historic dredging of alluvial gold, which the Company believes may have come from a source within the Kubi project.

ABOUT GHANA
Ghana is a stable democratic country with a long history of mining PMI Gold's properties are all located in southwest Ghana. This area has an endowment of ~200Moz of gold. Ghana has a long history of mining, with gold being mined in the country for over 1,000 years. The Obuasi mine has been in continuous production for over 100 years. Ghana is typically seen as one of the best West African nations for mining due to its very prospective geology, long history of mining, stable democratic government, transparent mining regulatory regime which is based on western mining law, and low levels of corruption. The country has past gold production of ~100Moz and has current gold resources of ~100 Moz. Of the West African nations, Ghana contributes ~55% of total reserves and ~44% of estimated annual production. Ghana's economy depends largely on exports of cocoa and gold, with the mining industry making up 5% of the countrys GDP. The country also has good transport and power infrastructure, as well as a skilled and mining friendly workforce with a large number of mining support services. The Government is entitled to a 10% carried net profits interest. The current gold royalty is 3%, however, there is current debate that this may increase to as high as 6%.

One of the lowest risk African countries

Very large gold endowment

INDUSTRY AND GEOGRAPHIC EXPOSURE

PMI is solely focussed on the exploration and development of its gold assets, all of which are located within Ghana in West Africa.

Page 12 of 22

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PMI Gold Corporation

20 December 2010

PEERS AND COMPETITORS

There are a large number of ASX and TSX listed companies mining and exploring for gold in West Africa. PMI currently has a mid-range resource base amongst its peers, with an above average grade. However on an EV/oz basis, the Company is trading significantly below the peer average of ~A$190/oz. See the charts below for some key comparatives.

Fig. 12:
Mid ranked on resources, but higher than average grade
9.0 8.0 7.0 6.0 8.1

West African resources with gold grades

Resource Moz
5.2 5.1 3.5 3.5 3.3

g/t 4.0 3.5 3.0 2.5 2.0

Moz

5.0 4.0 3.0 2.0 1.0 RSG SFM PRU MDL KGN AVR AVM HGR ADU NMG PMI GRY SBL AMX AZM BYR PIR VKA GMR CDT

2.8 2.8 2.1 2.0 1.6 1.5 1.3 1.2 1.2 1.1 0.5 0.5 0.2 0.2

1.5 1.0 0.5 -

Source: Company reports*

Fig. 13:
700 600 500 593

West African enterprise value per resource ounce

EV/Resource Oz
525 468 359 350 276 264 262 252 216 187 185 164 130

A$/oz

Cheap on an EV/resource

400 300 200 100 0

102 86

71

70

58

32

SFM MDL AMX GMR HGR PRU AVM GRY IMG CDT PIR ADU AVR AZM KGN RSG NMG BYR PMI SBL

Source: Hartleys estimates*

* Primary Exchange ASX ASX TSX TSX ASX ASX ASX ASX ASX ASX ASX TSX Ticker ADU AMX AVM AVR AZM BSR BYR CAY CDT GMR GRY HGR Company Adamus Resources Limited Ampella Mining Limited Avocet Mining PLC Avion Gold Corp Azumah Resources Limited Bassari Resources Limited Burey Gold Limited Canyon Resources Limited Castle Minerals Limited Golden Rim Resources Ltd Gryphon Minerals Limited High River Gold Exchange TSX TSX ASX ASX ASX TSX ASX ASX ASX TSX ASX ASX Ticker IMG KGN MDL NMG PIR PMI PRU RSG SBL SFM VKA WAF Company IAMGOLD Keegan Resources Inc Mineral Deposits Limited Noble Mineral Resources Limited Papillon Resources Limited PMI Gold Corporation Perseus Mining Limited Resolute Mining Limited Signature Metals Limited Semafo Inc. Viking Ashanti Limited West African Resources Limited

Page 13 of 22

Hartleys Limited

PMI Gold Corporation

20 December 2010

MANAGEMENT
Modified from the PMI ASX listing prospectus Peter Buck, M.Sc (Geology) - Non Executive Chairman Mr Buck is a geologist with 35 years of international exploration and production experience, principally in nickel, base metals and gold. During his career he has been associated with the discovery and development of a number of mineral deposits in Australia and Brazil. Mr Buck worked with WMC Resources for 23 years in a variety of senior exploration and production roles both in Australia and Brazil before joining Forrestania Gold Limited as Exploration Manager in 1994. Forrestania Gold Limited was subsequently acquired by LionOre Mining International Limited (LionOre) with whom he was the Director of Exploration & Geology until mid-2006. Mr Buck managed the highly successful exploration team that delineated the Maggie Hays nickel deposit and discovered the Emily Ann, Waterloo and Amorac nickel deposits and the two million ounce Thunderbox gold deposit in Western Australia. Mr Buck played a key senior management role in progressing these deposits through feasibility studies to production. Mr Buck also played key senior advisory roles in indigenous relations in Australia and in LionOre African operations and new business development. During this period Mr Buck was also a Non- Executive Director with Gallery Resources Limited and Breakaway Resources Limited (Breakaway). Douglas R. MacQuarrie, P. Geo. - President & Chief Executive Officer Mr. MacQuarrie is a geologist/geophysicist specialising in gold exploration. He received a combined Honours degree in Geology and Geophysics from the University of British Columbia in 1975. Since that time, Mr MacQuarrie has worked continuously in mineral exploration, and in the last 17 years his work has focussed on exploring new gold deposits in West Africa with a focus on Ghana. He also has extensive public company experience and has been involved in the discovery of several significant gold deposits, including the ABO deposit in British Columbia, and the Adansi Asassi and Fromenda deposits in Ghana. Mr MacQuarrie is a director of the Company (and its wholly owned subsidiaries), and of Goknet and Switchback Mining Company Limited, the original property vendors to PMI. Thomas Ennison, LLM - Executive Director, Ghana Legal Counsel Mr. Ennison is a Barrister and Solicitor of the Supreme Court of Ghana and serves as Corporate Secretary to PMI Golds Ghanaian subsidiaries. Formerly the Ghanaian Ambassador to Italy and Advisor to the U.N. on mining law, Mr. Ennison was also the Principal State Attorney in the Attorney Generals Dept and Head of the International Law Unit, with the responsibility for the preparation of mining agreements. He has also served as General Legal Counsel for the Economic Community of West African States. Mr Ennison is a director of the Company, its wholly owned subsidiaries, and of Goknet and Switchback. Dr. John A. Clarke, Ph.D, MBA - Executive Director Dr. Clarke has held roles as Vice-Chairman and CEO of TSX listed Nevsun Resources and, prior to joining Nevsun, he was Executive Director of Ashanti Goldfields Company Limited of Ghana responsible for strategic planning and business development. Dr. Clarke holds a B.Sc. in metallurgy from University College Cardiff, a Ph.D. in metallurgy from Cambridge University and an MBA from the University of Middlesex. He joined Ashanti in 1982 and contributed to Page 14 of 22

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PMI Gold Corporation

20 December 2010

establishing Ashantis gold exploration program throughout sub-Saharan Africa. Dr.Clarke is currently a Director of Banro Corporation, Mediterranean Resources Ltd and Great Quest Metals Ltd. Ross Ashton, B.Sc. (Geology) - Non Executive Director Mr Ashton has been involved in the exploration, consulting, financing and development of international resource projects since 1972. Most recently, in his capacity as Managing Director and subsequently Chair of Red Back Mining Inc, Mr Ashton was responsible for identifying the prospectivity and leading the team which discovered the multi-million ounce Chirano gold deposit in Ghana, West Africa. In 2004 Mr Ashton re-domiciled Red Back from the ASX to the TSX with a new Canadian Chief Executive Officer, management and board. In 2005, Mr Ashton resigned as Red Back Chair. In September 2010 Red Back, as a greater than 340,000 ounce per annum gold producer, was the subject of a merger with Kinross Gold Corporation which valued the Company at US$7.1B. Mr Ashton is a NonExecutive Director of Brockman Resources Limited, an ASX listed iron ore explorer/developer with a market cap of approximately $500 million. Honourable J.H. Mensah - Non Executive Director Hon. Mr. Mensah is the former Chairman of the National Development Planning Commission of Ghana, an advisory board that reports directly to the President of Ghana and to Parliament. He is also the former Member of Parliament for the riding of Sunyani East. Trained as an Economist, Hon. Mr. Mensah is widely respected in global development planning including formerly with the United Nations. Previously, he held the post of Minister of Finance and Economic Planning and latterly as Leader of Government Business, head of Economic Management Team, and senior Minister of the Government of Ghana. He was also a member of the African Advisory Council of the African Development Bank. Hon. Mr. Mensah also recently retired as an Independent Director of AngloGold Ashanti Limited.

Fig. 14:

Board Shareholdings (as at 5 November 2010)

Shares 277,778 173,750 245,060 25,000 500,000 2,540,000 3,761,588 2.0% Warrants 365,445 41,190 406,635 0.9% Options 1,000,000 2,087,500 950,000 250,000 500,000 1,000,000 5,787,500 84.2%

Peter Buck Douglas MacQuarrie Thomas Ennison Joseph Mensah John Clarke Ross Ashton Total % of issue

Source: PMI Gold Corporation

Page 15 of 22

Hartleys Limited

PMI Gold Corporation

20 December 2010

SHARE STRUCTURE
192.78m ordinary shares on issue As per the ASX IPO prospectus of 5 November 2010, the Company has 192.78m ordinary shares on issue, 47.56M warrants on issue exercisable at various dates and prices, as well as 6.87m options exercisable at various dates and prices. See Figure 15 for the details of PMIs paid and unpaid capital.

Fig. 15:
Shares Options

PMI Paid and Unpaid Capital (as per ASX IPO prospectus)
Class Exercise Date 12/01/2011 15/12/2011 26/06/2012 21/09/2012 26/03/2013 14/09/2013 9/09/2014 28/10/2014 13/05/2015 18/08/2013 31/03/2012 31/03/2012 14/05/2012 14/05/2012 16/07/2012 16/10/2011 12/10/2011 Exercise Price C$0.20 C$0.20 C$0.20 C$0.20 C$0.20 C$0.20 C$0.30 C$0.40 C$0.50 C$0.48 C$0.10 C$0.20 C$0.10 C$0.20 C$0.20 C$0.30 C$0.50 Number 192,782,758 62,500 425,000 125,000 50,000 375,000 50,000 4,209,687 500,000 650,000 425,000 10,000,000 650,000 2,062,500 1,837,500 13,773,000 17,240,000 2,000,000 54,435,187 C$12,839,756

Warrants

Total unpaid capital C$12.8m

Total Options & Warrants Total Unpaid capital

Source: PMI Gold Corporation

Fig. 16:

Top Shareholders
Holder Number of Shares 26.11 19.61 18.51 10.49 4.56 4.00 2.74 Percentage 13.5% 10.2% 9.6% 5.4% 2.4% 2.1% 1.4%

Macquarie Group Waratah Investments AJ Miller HSBC Custody Nominees (Australia) Limited) Citicorp Nominees Pty Limited Timeless Precious Metal Fund Ross Ashton Superannuation

Source: PMI Gold Corporation

FINANCIALS
Given that PMI is a junior explorer transitioning to developer, previous financial performance, balance sheet and cashflows are not reflective of the Company going forward. Note that FY2011 figures going forward are Hartleys Research estimates, not the Companys. The Companys accounts are detailed in Canadian dollars. Note that PMI Gold adheres to a June 30 financial year (See figures 17,18 & 19).

Capex requirements
Capex of US$150m US$200m required to fund Obotan and Kubi within next 18months The Company is currently undertaking a prefeasibility study into the development of its Kubi and Obotan mines. At this point in time, the final capital requirements have yet to be ascertained. However, we have estimated that the funds required for this, including working capital, will be in the order of US$150m - US$200m. In the financial statements seen above, we have assumed this has been funded by 50:50 split between debt and equity which is raised during FY12 and FY13. Page 16 of 22

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PMI Gold Corporation

20 December 2010

Fig. 17:

Profit and Loss

Unit C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m FY2010A 0.1 (3.0) (2.9) (2.9) (0.1) (3.0) (3.0) (3.0) FY2011F 0.2 (4.1) (3.9) (3.9) (3.9) (3.9) (3.9) FY2012F 0.2 (4.1) (3.9) (3.9) (3.9) (3.9) (3.9) FY2013F 27.4 (25.0) 2.3 (6.0) (3.6) (6.5) (10.2) (10.2) (10.2)

Financial Performance Net Revenue Total Costs EBITDA Depreciation/Amort EBIT Net Interest Pre-Tax Profit Tax Expense NPAT Abnormal Items Reported Profit

Source: PMI Gold Corporation, Hartleys estimates

Fig. 18:

Balance Sheet
Unit C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m FY2010A 2.9 0.1 3.0 0.2 21.1 21.3 24.3 (0.4) (0.4) (0.4) 23.9 FY2011F 30.6 0.1 30.7 0.2 26.1 26.3 57.0 (2.0) (2.0) (2.0) 55.1 FY2012F 107.1 0.1 107.3 80.2 36.1 116.3 223.6 (50.0) (14.4) (64.4) (64.4) 159.2 FY2013F 46.7 5.0 51.6 164.9 44.9 209.9 261.5 (100.0) (9.6) (109.6) (109.6) 151.8

Financial Position Cash Other Current Assets Total Current Assets Property, Plant & Equip. Exploration & Develop. Investments/other Tot Non-Curr. Assets Total Assets Short Term Borrowings Other Total Curr. Liabilities Long Term Borrowings Other Total Non-Curr. Liabil. Total Liabilities Net Assets

Source: PMI Gold Corporation, Hartleys estimates

Fig. 19:

Cash Flow Statement

Unit C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m C$m FY2010A (1.5) (1.7) (3.2) (0.2) (3.6) (3.7) 12.8 9.6 2.7 FY2011F (2.3) (2.3) (5.0) (5.0) 35.0 35.0 27.7 FY2012F 8.5 8.5 (80.0) (10.0) (90.0) 50.0 108.0 158.0 76.5 FY2013F (7.3) (6.5) (13.8) (89.5) (10.0) (99.5) 50.0 2.8 52.8 (60.5)

Cashflow Operating Cashflow Income Tax Paid Interest & Other Operating Activities Prop, Plant, Equip & Devel Exploration & Eval. Investments Investment Activities Borrowings Equity Dividends Paid Financing Activities Net Cashflow

Source: PMI Gold Corporation, Hartleys estimates

Page 17 of 22

Hartleys Limited

PMI Gold Corporation

20 December 2010

VALUATION
PMI Valuation A$0.93/share We have undertaken a sum of parts valuation for PMI, based on a conceptual production scenario for Obotan and Kubi. Our funding weighted valuation for Obotan and Kubi is A$0.61/share with a sum of parts valuation for the Company of A$0.93/share after incorporating in the money options and warrants. Using spot prices our valuation is A$1.65/share

Spot PMI Valuation A$1.65/share

Fig. 20:
Gold Price AUDUSD CADUSD

Hartleys commodity price and exchange rate assumptions

FY US$/oz 2011 1301 0.91 1.00 2012 1250 0.88 1.03 2013 1150 0.83 1.02 2014 1022 0.80 1.00 2015 936 0.78 1.00 2016 936 0.78 1.00

Source: Hartleys estimates

METHODOLOGY
Our development scenario involves production of ~100kozpa from Obotan and ~50kozpa from Kubi for total annual output of 150koz. Production commences in early 2013 using a 2.0Mtpa plant. All Obotan production is assumed to be via open Based on 150kozpa pit, contributing ~87.5% of the plant feed at a head grade of 2.0g/t gold. Kubi DCF for Kubi and contributes the remainder of the feed (~250ktpa) at a head grade of 6.0g/t gold. Life Obotan, then weighted of mine cash costs are ~US$460/oz. Mine life is ~8 years for both operations, with by financing total gold production of ~1,130koz of gold, which equates to a ~73% resource to scenarios. reserve conversion (using a resource base of 1,557koz). Preproduction capital is estimated to be US$140m for Obotan and US$20m for Kubi. We have incorporated a series of funding scenarios for this production profile to generate a weighted average valuation. Our funding scenarios are 100% debt, 50:50 debt equity with equity at current prices, and 100% equity funding at current prices.

Fig. 21: Funding weighted valuations for Kubi and Obotan

Funding risk valuation scenarios (assumes zero project risk, zero corporate overheads) Gold Price (US$/t) NPV (A$m) Cost of Equity Startup Capital Requirement (A$m) + cont. Capital spending begins 100% funded with debt - Assumed annual principle repayments (A$m) - assumed interest rate - NAV (A$m) - NAV / share (A$) 50% funded with debt & 50% equity - Assumed capital raising price (A$) - NAV - new shares - NAV / share (A$) 100% funded equity at current prices - Assumed capital raising price (A$) - NAV (A$m) - new shares - NAV / share Assumed probabilities 100% funded with debt 50% funded with debt & 50% equity 100% funded equity at current prices Funding Risk Weighted NAV per share Hartleys Gold Prices 72.1 10% 173.8 Mar-12 43.4 8% 74.2 0.38 0.652 170.2 133.3 0.62 0.652 225.7 266.5 0.64 10% 40% 50% 0.61 Spot Prices 277.6 10% 173.8 Mar-12 43.4 8% 279.3 1.45 0.652 374.5 133.3 1.38 0.652 431.1 266.5 1.26 10% 40% 50% 1.33

Source: Hartleys estimates

Page 18 of 22

Hartleys Limited

PMI Gold Corporation

20 December 2010

PRICE TARGET
PMI price target is the same as our valuation of A$0.93/share When combining our funding weighted valuation for Kubi and Obotan with the other key aspects of the Company, we derive a valuation for PMI Gold Corporation Limited of A$0.93/share. This incorporates a value of A$50m (~A$0.20/share) for exploration, recognising the Companys outstanding quality ground holding and potential for additional discoveries. However, we actually see this value as conservative, as a major discovery has the potential to add significantly more value than $50m.

A$50m exploration value justified by quality of the ground

Fig. 22:

Hartleys Sum of Parts Valuation for PMI

A$m 150.4 50.0 35.0 0.0 (15.7) 2.0 9.2 230.8 A$/share 0.61 0.20 0.14 0.00 (0.06) 0.01 0.04 0.93

Obotan & Kubi Exploration Cash Forwards Corporate Overheads Total Debt Tax Losses Options & Other Equity Total

Valuation updated as development studies are updated

Source: Hartleys Estimates

As scoping and feasibility studies are completed on the project, we will update our model and valuation for the Company.

SENSITIVITIES
As can be seen from Figure 23, our valuation is most sensitive to the US$ gold price, as well as CADUSD exchange rate. Valuation most sensitive to gold price and exchange rates

Fig. 23:

Sensitivities to Hartleys sum of parts va luation

-10% 272 250 194 A$m Variation 0 231 231 231 +10% 197 212 268 % Variation -10% +10% 18% -15% 8% -8% -16% 16%

Exchange Rate Operating Costs Gold Price

Source: Hartleys Estimates

Risks are typical of companies at the development study stage in West Africa, though sovereign risk is lower than many peers

RISKS
Key risks to the development of both Obotan and Kubi include commodity price risk, operating and capital cost escalation, geological and ore-body risk, permitting risk as well as funding risk. In the next 18 months, the Company will need to fund ~A$160m of capex depending on the outcome of the prefeasibility study. Upside risks include exploration success and strong gold prices.

Page 19 of 22

Hartleys Limited

PMI Gold Corporation

20 December 2010

SIMPLE S.W.O.T. TABLE

Strengths Threats Historic mining means ore bodies well understood Relatively low operating costs High gold recoveries Good operating environment with low sovereign risk Significant in country experience Low grade of some resources TSX and ASX governance logistics Not funded to development Need to staff up on ground Excellent near mine exploration potential for incremental production increases Excellent regional exploration potential for step change production increases Further ground acquisitions Gold price fluctuations Development and production delays Staffing, contractor and capital cost escalation

Weaknesses

Opportunities

INVESTMENT THESIS & RECOMENDATION

Good mix of development potential and exploration upside Large EV/resource oz discount relative to peers Strong newsflow over the next 12 months We see PMI as having a good mix of near term production and outstanding exploration potential. Whilst the Company will be focussed on bringing Obotan and Kubi into production, there will also be ongoing exploration across its projects, which we expect to deliver a steady string of good results from Q2 CY2011. The Company is operating in one of the best jurisdictions in Africa, with outstanding prospectivity for gold. In addition, the main deposits are well understood and relatively low risk due to the previous history of mining. The Company is trading at a discount to our overall valuation and significantly below the peer EV/oz average for West African explorers/miners. As the Company progresses its development studies, we expect the Company to be rerated the closer it gets to production. Likewise, any significant exploration success will also see the Company rewarded via share price appreciation. We initiate coverage of PMI Gold Corporation with a Speculative Buy recommendation.

Initiate coverage with Speculative Buy

Page 20 of 22

HARTLEYS RESEARCH COVERAGE LIST

Hartleys Research Coverage Nam e Resources Gold 1. 2. 3. 4. 5. 6. 7. 8. 9. Intrepid Mines Limited Integra Mining Limited Beadell Resources Limited Silver Lake Resources Limited Dominion Mining Limited Catalpa Resources Limited Gold One International Limited Tanami Gold NL Focus Minerals Ltd IAU IGR BDR SLR DOM CAH GDO TAM FML PVM PIR YTC CRC AQD ERM CAY GPR SAU AGO CTM RIV WSA JML AVI MMW KAS HAZ SRR PEN IPT 2.07 0.695 0.700 2.31 3.170 1.940 0.315 0.970 0.054 0.650 0.580 0.410 0.185 0.150 0.135 0.580 0.400 0.066 2.960 0.115 16.300 5.980 0.600 0.200 0.535 0.300 0.205 0.155 0.072 0.120 Sub-Total 886 525 435 413 327 316 254 252 155 125 109 80 36 34 27 18 15 9 1,617 70 3,071 1,070 332 30 87 71 39 35 118 14 10,571 Explorer Producer Developer Producer Producer Producer Producer Producer Producer Developer Explorer Developer Developer Explorer Explorer Explorer Explorer Explorer Producer Explorer Developer Nickel Producer Zinc-Copper Producer Copper/Iron Ore Dev. PGM-Cu-Ni Developer Tin Developer Tungsten Developer Manganese Explorer Developer Explorer Speculative Buy Speculative Buy Speculative Buy Buy Speculative Buy Buy Speculative Buy Speculative Buy Speculative Buy Speculative Buy No Rating Buy Speculative Buy Speculative Buy Speculative Buy Speculative Buy Speculative Buy Speculative Buy Buy Speculative Buy Speculative Buy No Rating Buy Speculative Buy Speculative Buy Buy Speculative Buy Speculative Buy 1. Buy Speculative Buy 2. 3. 4. 5. 6. 1. 2. 3. 4. 5. 6. 69. Source: IRESS, Hartleys Research. * 20 Dec 2010 1. 2. 3. 4. 5. 6. 7. 8. 9. Industrials Resource Services - Capital Intensive Ausdrill Limited ASL Fleetw ood Corporation Mermaid Marine Ltd NRW Holdings Ltd Clough Limited Matrix Composites & EngineeringHoldings Limited Macmahon Limited Imdex Ltd MACA Ltd FWD MRM NWH CLO MCE MAH IMD MLD PEA SWK NMS MND DCG RCR LYL LCM VMG WAN ASB IIN CCV AMM RDH 2.85 12.94 3.00 2.23 0.78 6.72 0.53 1.82 1.68 0.35 0.45 0.21 17.75 2.60 1.46 4.79 1.20 0.32 6.53 3.18 2.87 0.68 0.33 0.85 Sub-Total GRAND TOTAL 746 745 620 560 530 490 389 353 252 120 105 89 1,527 321 193 185 72 68 1,595 598 436 272 233 23 10,522 56,927 Contract Drilling Accomodation Oil & Gas Services Contract mining Oil & Gas Construction Oil & Gas Services Contract mining Drilling Supplies Contract mining Remote Pow er Contract Drilling Oil & Gas Services Construction Construction Engineer. & Constr. Engineer. & Constr. Engineer. & Constr. Engineer. & Constr. Media Civil and Military Vessels Telecommunications Unsecured Finance Telecommunications 'For profit' education Buy Hold Speculative Buy Buy No Rating Buy Hold Buy Buy Buy Speculative Buy Speculative Buy Buy Buy Buy Buy Buy Hold Hold Speculative Buy Buy Buy Buy Speculative Buy 1. 2. 3. 4. 5. 6. 1. 2. 3. 4. 5. 6. 7. 8. 9. Ticker Last Price* M. CAP (A$m ) Status Hartleys Research Recom m endation Oil & Gas Conventional Oil & Gas Woodside Petroleum Ltd Nexus Energy Ltd Carnarvon Petroleum Ltd Tap Oil Ltd Cooper Energy Ltd Otto Energy Ltd FAR Ltd Amadeus Energy Ltd Sun Resources NL Non Conventional Oil & Gas Aurora Oil and Gas Ltd Samson Oil & Gas Ltd European Gas Ltd Oilex Ltd Strike Energy Ltd Entek Energy Ltd AUT SSN EPG OEX STX ETE 2.14 0.059 0.45 0.35 0.17 0.13 Sub-Total 716 98 90 76 54 37 35,833 Producer / Developer Developer / Producer Producer / Explorer Explorer / Producer Explorer / Producer Producer / Explorer Reduce Buy Speculative Buy Speculative Buy Buy Speculative Buy WPL NXS CVN TAP COE OEL FAR AMU SUR 42.88 0.41 0.45 0.80 0.42 0.093 0.084 0.225 0.080 33,452 393 309 192 123 100 94 68 31 Major Developer / Explorer Producer / Explorer Producer / Explorer Producer / Explorer Explorer / Producer Explorer / Producer Producer / Explorer Explorer / Producer Buy Speculative Buy Buy Buy Buy Buy Speculative Buy No Rating Speculative Buy Nam e Ticker Last Price* M. CAP (A$m ) Status Hartleys Research Recom m endation

10. PMI Corporation Limited 11. Papillon Resources Limited 12. YTC Resources Limited 13. Cortona Resources Limited 14. Ausquest Limited 15. Emmerson Resources Limited 16. Canyon Resources Limited 17. Geopacific Resources NL 18. Southern Gold Limited 1. 2. 1. 1. 2. 3. 1. 2. 3. 4. 1. 2. Iron Ore Atlas Iron Limited Centaurus Metals Ltd Coal Riversdale Mining Limited Base Metals Western Areas NL Jabiru Metals Limited Avalon Minerals Linited Other m etals Magma Metals Limited Kasbah Resources Limited Hazelw ood Resources Ltd Shaw River Resources Limited Uranium Peninsula Energy Ltd Impact Minerals Limited

10. Pacific Energy Ltd 11. Sw ick Mining Services Ltd 12. Neptune Marine Ltd Monadelphous Group Limited Decmil Group Limited RCR Tomlinson Ltd Lycopodium Limited LogiCamms Limited VDM Group Limited Other Industrial Com panies West Australia New s Hdgs Ltd Austal Limited iiNet Limited Cash Converters Internat. Limited Telecommunications Amcom Limited Education Ltd RedHill

Resource Services - Labour Intensive

Page 21 of 22

HARTLEYS CORPORATE DIRECTORY

Research
Trent Barnett Andrew Muir Mike Millikan David Wall Peter Gray Janine Hodges Head of Research Senior Resources Analyst Resources Analyst Energy Analyst Industrial Analyst Research Assistant +61 8 9268 3052 +61 8 9268 3045 +61 8 9268 2805 +61 8 9268 2826 +61 8 9268 2837 +61 8 9268 2831

Institutional Sales
Carrick Ryan Justin Stewart Simon van den Berg Steven Boyce Nick Wheeler +61 8 9268 2864 +61 8 9268 2887 +61 8 9268 3062 +61 8 9268 2867 +61 8 9268 3053 +61 8 9268 2840 +61 8 9268 2873 +61 8 9268 3065 +61 8 9268 2874 +61 8 9268 2847 +61 8 9268 2875 +61 8 9268 2850 +61 8 9268 2876 +61 8 9268 2860 +61 8 9268 2883 +61 8 9268 2811 +61 8 9268 2844 +61 8 9268 2887 +61 8 9268 2890 +61 8 9268 2842 +61 8 9268 3040 +61 8 9268 2894 +61 8 9268 2892 +61 8 9268 2895 +61 8 9268 2897 +61 8 9268 2857 +61 8 9268 2898 +61 8 9268 2828 +61 8 9268 2807 +61 8 9268 2835 +61 8 9268 3027 +61 8 9268 2896 +61 8 9268 2856 +61 8 9268 2858 +61 8 9268 2820 +61 8 9268 2810 +61 8 9268 3054 +61 8 9268 3051 +61 8 9268 2868 +61 8 9268 3059 +61 8 9268 2833 +61 8 9268 2839 +61 8 9268 2834 +61 8 9268 2865 +61 8 9268 2855 +61 8 9268 3060 +61 8 9268 2806 +61 8 9268 3041

Corporate Finance
Grey EgertonWarburton Richard Simpson Paul Fryer Dale Bryan Ben Wale Ben Crossing Stephen Kite Scott Weir Head of Corporate Finance Director - Corporate Finance Director - Corporate Finance Director - Corporate Finance Senior Manager - Corporate Finance Senior Manager Corporate Finance Senior Manager Corporate Finance Corporate Finance Exec. +61 8 9268 2851 +61 8 9268 2824 +61 8 9268 2819 +61 8 9268 2829 +61 8 9268 3055 +61 8 9268 3047 +61 8 9268 3050 +61 8 9268 2821

Wealth Management
Nicola Bond Bradley Booth Adrian Brant Nathan Bray Sven Burrell Simon Casey Tony Chien Travis Clark David Cross Nicholas Draper John Featherby Ben Fleay John Georgiades John Goodlad Andrew Gribble David Hainsworth Neil Inglis Murray Jacob Gavin Lehmann Shane Lehmann Steven Loxley Andrew Macnaughtan Christian Marriott Scott Metcalf David Michael Damir Mikulic Nicole Morcombe Jamie Moullin Chris Munro Michael Munro Ian Parker Ian Plowman Margaret Radici Charlie Ransom (CEO) Elliott Rowton Conlie Salvemini David Smyth Greg Soudure Sonya Soudure Dirk Vanderstruyf Alex Wallis Marlene White Samuel Williams

Registered Office
Level 6, 141 St Georges Tce Perth WA 6000 Australia Postal Address GPO Box 2777 Perth WA 6001 Australia Contact Details Telephone: +61 8 9268 2888 Facsimile: +61 8 9268 2800 Website: www.hartleys.com.au Email: info@hartleys.com.au Note: personal email addresses of company employees are structured in the following manner: firstname_lastname@hartleys.com.au Hartleys Recommendation Categories No Rating Buy Speculative Buy No recommendation. Share price appreciation anticipated Share price appreciation anticipated but it is higher risk than a Buy. For the share price to rise it may be contingent on the outcome of an uncertain or distant event. Take no action. Stock is trading above the share price target and there is a near term negative catalyst that could cause weakness. Significant price depreciation anticipated

Hold Reduce / Take profits Sell

Disclaimer/Disclosure The author of this publication, Hartleys Limited ABN 33 104 195 057 (Hartleys), its Directors and their Associates from time to time may hold shares in the security/securities mentioned in this Research document and therefore may benefit from any increase in the price of those securities. Hartleys and its Advisers may earn brokerage, fees, commissions, other benefits or advantages as a result of a transaction arising from any advice mentioned in publications to clients. Hartleys Limited has been engaged by PMI Gold Corporation (PMI Gold) as broker to the Offer in respect of the ASX Listing of PMI Gold for which it will earn fees. Hartleys has assisted in the completion of capital raisings in the past 12 months for PMI Gold, for which it has earned fees. Hartleys has a beneficial interest in 2 million warrants in PMI Gold, and upon completion of the ASX Listing will be issued with 2.5 million options and 500,000 shares. Any financial product advice contained in this document is unsolicited general information only. Do not act on this advice without first consulting your investment adviser to determine whether the advice is appropriate for your investment objectives, financial situation and particular needs. Hartleys believes that any information or advice (including any financial product advice) contained in this document is accurate when issued. Hartleys however, does not warrant its accuracy or reliability. Hartleys, its officers, agents and employees exclude all liability whatsoever, in negligence or otherwise, for any loss or damage relating to this document to the full extent permitted by law.

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